In his first week as Prime Minister, Mr Cameron told civil servants that he wanted 'us to be the greenest
government ever' Reuters

David Cameron today faces a revolt of business leaders, councils, environment campaigners and unions furious at his decision to cut funding for household solar energy, severely undermining his claim that the coalition would be the "greenest government ever".

In a letter to the Prime Minister seen by The Independent on Sunday, a coalition of 55 individuals and groups warns he will "strangle at birth" Britain's booming solar panel industry – threatening 25,000 jobs – by halving the state subsidy for the popular "feed-in tariff" scheme.

The funding for households who feed excess electricity generated by their solar panels into the national grid is to be cut from 43p to 21p per kilowatt hour (kwh) from next month, doubling the length of time people would have to wait before their solar panels became economically viable.

The feed-in tariff scheme is one of the most popular environmental measures introduced by any government. It has already been adopted by 100,000 private and housing association homes, and was championed by David Cameron within weeks of him becoming Conservative leader.

Yet last month ministers announced that, from 12 December, the subsidies would be cut in half, despite claims they were consulting on the plan.

A letter by a broad alliance – from the Federation of Small Businesses and house-building organisations to council leaders from all three political parties, as well as the Town and Country Planning Association – has been organised by Friends of the Earth and the Cut Don't Kill campaign, which is pressing for the Government to temper the reforms. Mr Cameron and Chris Huhne, the Energy and Climate Change Secretary, are also under pressure from the Confederation of British Industry, whose chief, John Cridland, said the measure was an "own goal". Mr Huhne has also been warned that 20 Liberal Democrat MPs – more than a third of the parliamentary party – are fighting the proposals.

In scathing language, the letter tells Mr Cameron: "This could only knock confidence in the UK's determination to build a low-carbon economy and hugely undermine your determination to lead the 'greenest Government ever'."

In his first week as Prime Minister, Mr Cameron told civil servants at the Department for Energy and Climate Change: "I want us to be the greenest government ever – a very simple ambition and one that I'm absolutely committed to achieving." Yet the solar electricity cut is just the latest in a series of U-turns and retreats on environmental policies by the coalition government.

The boom in solar energy has not been confined to middle-class families: 100,000 properties belonging to housing associations have applied for panels on their roofs.

The feed-in tariff scheme's popularity has led to its downfall, as ministers claim they must scale back the subsidies to keep funds within the £867m budget.

Howard Johns, of the Cut Don't Kill campaign, said: "This is poorly thought out, counterproductive and absurdly rushed. David Cameron can set this right and prove his commitment to green growth by stepping in to prevent such a deep cut. We can accept a cut, but the current proposal is devastating."

Caroline Flint, Labour's climate change spokesperson, said: "Until consumers are offered a simple, fair tariff, and all energy producers are forced to sell their energy to any supplier, the public will not be given a fair choice; people power alone will be unable to force down prices."

But Greg Barker, Climate Change minister, said: "My priority is to put the solar industry on a firm footing so that it can remain a successful and prosperous part of the green economy, and so that it doesn't fall victim to boom and bust."

A typical solar panel installation costs around £12,000, meaning homeowners have to wait eight years under the feed-in-tariff rate of 43p per kwh to earn the money back. This would double to 16 years' payback time under the new 21p rate.

Environmental u-turns: How PM has failed to make his government 'greenest ever'

Planning New rules will strip away protection of the countryside from development – the Government has so far resisted a continuing, widespread campaign against the plans.

Motorway speeds To the horror of environmental campaigners, the Government is raising the limit to 80mph, adding more than two million tons a year to carbon emissions.

Forests Ministers announced last year a mass sell-off, despite no reference in the Conservative manifesto or coalition agreement, but a public campaign forced a U-turn.

Green investment bank A flagship environmental policy has been severely undermined by a Treasury block on it providing loans. It will not be allowed to borrow until 2015.

Eco-homes Another legacy of Labour, but any new homes built with "zero carbon" credentials will not have carbon emissions from electrical appliances counted, undermining the definition.

Quangos The Forestry Commission, Natural England and the Environment Agency have all been prevented from policy-making, while the Sustainable Development Commission and the Royal Commission on Environmental Pollution have been axed.